Generative AI Can Boost Canada’s Productivity. Responsible Adoption is Key

Much has been written about Canada’s persistent and lagging productivity levels. Labour productivity has declined in six out of the last seven quarters, consistently putting Canada below most of its G7 peers. With productivity growth so closely tied to our standard of living and Canada’s future prosperity, it’s no surprise the Bank of Canada’s Deputy Governor has declared our declining productivity an economic “emergency.” With a stubbornly high inflation rate and global competition, we’re at a tipping point. We need to fix our productivity challenge or risk falling further behind.

Urgent action is required, and Generative AI is part of the solution.

Improving Productivity With Generative AI

Canada has been the epicenter of AI innovation for the last decade. Pioneering AI research excellence led by some of the world’s leading AI experts combined with significant investments by government and industry has resulted in a strong and diverse AI ecosystem that is fueling local innovation. Canadian efforts have spurred significant breakthroughs in healthcare and diagnostic imaging and transformed sectors such as mining and energy. 

The adoption of Gen AI is critical to support Canada’s economic performance and boost prosperity to match that of our global peers. Findings from our new report estimate that Gen AI could save Canadian workers up to 125 hours a year, equivalent to a half-hour each workday, by helping workers complete tasks faster and by automating routine tasks. This could add $180 billion annually to the economy in productivity gains by 2030. To put that into perspective, that’s an 8% increase in productivity, when Canada’s productivity has only grown 0.6% since 2015, close to 10 times slower than the OECD average. We also estimate an economic uplift through the domestic creation of new products and services. This could mean improved wages for Canadians, more job opportunities, spurring new and innovative businesses, unlocking business and organizational value and enhancing Canada’s competitiveness globally. 

And the benefits are not exclusive to large enterprises—Canada’s small and medium-sized businesses could realize up to $100 billion in economic value by 2030 using Gen AI. 

This is the potential economic opportunity—but only if we responsibly adopt at pace to take advantage of this revolutionary technology. We can deliver value to Canadians by reinvesting our most precious asset—time—to support higher-value activities, while also dramatically improving operational efficiencies across the business and public sector landscape. Leveraging Gen AI will be crucial in this transformation, especially in enhancing Canada’s already strong knowledge and service sectors. 

The Responsible Adoption of Generative AI

To enable responsible adoption, we need to increase public trust and jointly lift adoption—together, this will build a strong foundation. Trust in AI is poor among Canadians, with only 31% of Canadians saying they trust AI, 23 percentage points lower than the global average.

And only 9% of Canadian businesses are using Gen AI. We can increase public trust by showcasing successful implementation stories and showing the tangible benefits of Gen AI.

Part of building this foundation means supporting the environment where every business, organization and individual can thrive in the AI-driven economy. To do this, we need a clear policy framework that balances responsible adoption and innovation; we need to foster a collaborative ecosystem and strong partnerships across industry, government, academia and civil society around Gen AI while also enhancing international collaboration to learn from other nations; we need to increase access to affordable AI models that enables value for every business; and we need to ensure that workers and leaders are AI-ready, with the skills, mindset and understanding to succeed.

We must also refine and scale. We need to monitor and evaluate the impact of Gen AI adoption through our efforts above and scale up the successful initiatives that deliver positive outcomes for Canadians. 

In parallel, we need to seed adoption. The Conference Board of Canada’s latest innovation report card shows that Canada suffers from an “innovation paradox”—we’re highly educated and entrepreneurial but averse to risk. We can drive broader adoption of Gen AI by reducing implementation risks and offering incentives to businesses to help encourage experimentation with Gen AI across sectors and organization of varying sizes. 

Toward a Future Supported by AI

Lifting responsible adoption at every stage requires the collaboration and support of all stakeholders. To help strengthen the foundation, every organization should begin developing and applying their own AI policies with clear internal guidelines. This will help increase public trust in Gen AI and prevent innovation from being halted while government regulation is finalized. Moreover, to seed adoption, we recommend Canada work with organizations like DIGITAL, Scale AI or the Canadian Institute for Advanced Research (CIFAR), which have deep expertise and insight into the global and Canadian AI landscape, to administer incentive programs to help de-risk Gen AI adoption for different sectors and business sizes. As trusted entities, these organizations can support the responsible development and implementation of trustworthy AI and reinforce the value of this technology for every business. 

There’s not a shadow of a doubt that Canada has a generational opportunity with AI. Every business and organization, public or private, big or small, stands to gain from this technology. If we can do more to support responsible adoption, increase understanding and build trust, we can seize the productivity, competitiveness and prosperity advantages Gen AI offers. But we all need to embrace this technology now and learn from other nations. The stakes are too high, and the opportunities are too great to wait and see.